The creation of European Sovereign Bond Backed Securities (SBBS) would be unlikely improve the eurozone's institutional underpinnings sufficiently to provide a near-term boost to the sovereign ratings of the bloc's lower-rated countries. We see high hurdles to SBBS implementation and several uncertainties as to how they would operate.

Congressional passage of financial reform legislation easing the Dodd-Frank Act for smaller and custodial banks is not likely to be a near-term ratings issue but could be negative for some banks' credit profiles over the long term, if it results in significantly reduced capital levels

The long-term outlook for the Asian thermal coal prices is improving, amid rising regional demand and falling mining investment, which partly reflects tighter environmental policies at banks. Mining companies in the region are likely to face less margin pressure than under our previous price assumptions, which, along with lower capex, could support deleveraging.

Tata Steel Limited's (TSL, BB/Rating Watch Evolving) acquisition of a controlling stake in Bhushan Steel Limited is likely to raise TSL's leverage over the next two to three years, which will offset the benefits to its credit profile from the resultant increase in market share in India as well as reduced exposure to structural weaknesses in Europe.

The announced partnership between Ocado PLC (BB-/Stable) and The Kroger Co. (BBB/Negative) will accelerate the former's business transformation into a logistics and technology provider from a retail player, increasing geographical reach and diversification of the company's business. We view execution as the key driver of Ocado's business risk, as the company delivers its agreed contracts as logistics provider.

Battery and other storage solutions could solve the intermittency problems associated with renewables and accelerate their penetration into the overall energy mix.The share of renewables in the energy mix has been growing consistently over the past few years, although it was still only 9% of global generation in 2017 (excluding hydropower).

The lira continued its recent weakness on Monday, hitting fresh record lows against both the dollar and the euro. Its decline this year is due to a number of factors including a widening current account deficit (USD16.4 billion in 1Q18 against USD8.4 billion in 1Q17), inflation remaining in double digits, and political and geopolitical stresses.

The victory of incumbent Nicolas Maduro in Venezuela's presidential election signals that the political status quo and the country's economic crisis, characterized by hyperinflation, falling oil production, a sovereign debt default and US sanctions, will persist.

The coalition policy agreement of Italy's two most populist and eurosceptic parties increases risks to the country's sovereign credit profile, notably through fiscal loosening and potential damage to confidence. How far these risks will translate into weaker credit metrics is uncertain and will depend on the government's ability to implement its programme and how it resolves trade-offs between different elements.

Feedback - Fitch Group, Inc. together with its subsidiaries and affiliates (collectively, “Fitch”) is committed to conducting its business with integrity, transparency and in compliance with the laws of the countries in which it operates. Should you wish to provide a comment please access the web form here.